WOLBANKGROUP
CAMBODIA'S FUTURE JOBS:
LINKING TO THE ECONOMY OF TOMORROW
Jobs are an important part of Cambodia's story of development success.
Cambodia will need to enact substantive reforms to secure more, better, and more inclusive jobs in the long term.
While                                                Domestic firms have
jobs in exporting firms have been key to Cambodia's             weak links to the export sector, and so do not benefit
development success, these firms have the potential             from its growth. Only 25 percent of inputs and supplies
to generate even greater gains for workers. In 2010-            for the garment sector are sourced from local firms. In
2015, one-third of all wage jobs were in FDI firms. In          contrast, the garments sectors of Vietnam, Bangladesh
2014, wages of workers employed directly or indirectly          and India respectively source 60 percent, 62 percent,
in exporting firms were equal to 15 percent of GDP (USD         and 100 percent of their inputs from domestic firms.
2.6 billion). However, the types of export activities that
Cambodia engages in pay lower wages, have lower
value-added, and employ fewer skilled workers than
the export baskets of peer countries.                                                             Cambodian
workers do not have the skills to be employed in the
types of jobs that will come from reform in the FDI and
domestic sectors. Only 13.5 percent of the working
Domestic firms are more numerous than               age population has completed high school. A four-year
foreign-owned ones, yet they are small, employing an            old Cambodian child today is expected to complete 9.5
average of 8 workers compared to the 124 workers in             years of school, but their learning will be equivalent
FDI firms.This is largely because the domestic business         to only 6.9 years. In 2016, 37.6 of exporters cited an
environment does not help entrepreneurs easily start           inadequately educated workforce as a top business
and grow new firms. For example, only 25 percent of             obstacle. These trends result in lower labor productivity
Cambodian firms have an overdraft facility or a loan            and a reliance on high-labor-content exports that are
from a financial institution, and the costs of registering      vulnerable to automation.
a business are so high that only 6 percent of small firms
have done so.
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